Q&A with Domain Realty’s Adam Wavrunek: Rising interest rates and why now is a good time to sell

Q&A with Domain Realty’s Adam Wavrunek: Rising interest rates and why now is a good time to sell

Q: I’m hearing from people that now may be a good time to sell. Why would that be?

A: “One reason is that for last five years, housing prices continue to increase. And if you were to look at increases in year-over-year basis, the biggest gains made in earlier years — say three to four years ago — and the volume of price increases is starting to slow down in the Chicago area. And the prices are near where they were at peak levels before the (2007) crash.

So if you view the housing market like the stock market, you obviously want to buy low and sell high, and you want to look for trends that show the prices are going down. I feel like there are some of those trends popping up now in the housing market.

Rising rents, too, really across the board, are something to keep an eye on. The rents on the northwest side of the city are more stable, but even those are being raised a little bit. Rents are so expensive already. For the younger generation, it can be tough to save up for a down payment, but it’s a great move in the long run.

Q: Is the fear of rising interest rates finally real?

A: Yes, definitely. For the first time, the Fed increased rates recently. Although it doesn’t have an exact correlation to retail mortgage interest rates, as the discount rate increases, banks will inevitably have to raise mortgage rates to maintain the same margin on the loans they originated.

People have been talking about this for years, and while there is no exact date, it’s going to be a gradual thing. Don’t expect the government to flip a switch to get back to 7%. That won’t happen.